Correlation Between GLG LIFE and DISTRICT METALS
Can any of the company-specific risk be diversified away by investing in both GLG LIFE and DISTRICT METALS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GLG LIFE and DISTRICT METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLG LIFE TECH and DISTRICT METALS, you can compare the effects of market volatilities on GLG LIFE and DISTRICT METALS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GLG LIFE with a short position of DISTRICT METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and DISTRICT METALS.
Diversification Opportunities for GLG LIFE and DISTRICT METALS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and DISTRICT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and DISTRICT METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISTRICT METALS and GLG LIFE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GLG LIFE TECH are associated (or correlated) with DISTRICT METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISTRICT METALS has no effect on the direction of GLG LIFE i.e., GLG LIFE and DISTRICT METALS go up and down completely randomly.
Pair Corralation between GLG LIFE and DISTRICT METALS
Assuming the 90 days trading horizon GLG LIFE TECH is expected to generate 5.84 times more return on investment than DISTRICT METALS. However, GLG LIFE is 5.84 times more volatile than DISTRICT METALS. It trades about 0.06 of its potential returns per unit of risk. DISTRICT METALS is currently generating about 0.06 per unit of risk. If you would invest 1.80 in GLG LIFE TECH on November 1, 2024 and sell it today you would earn a total of 0.20 from holding GLG LIFE TECH or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLG LIFE TECH vs. DISTRICT METALS
Performance |
| Timeline |
| GLG LIFE TECH |
| DISTRICT METALS |
GLG LIFE and DISTRICT METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and DISTRICT METALS
The main advantage of trading using opposite GLG LIFE and DISTRICT METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE position performs unexpectedly, DISTRICT METALS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DISTRICT METALS will offset losses from the drop in DISTRICT METALS's long position.The idea behind GLG LIFE TECH and DISTRICT METALS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| DISTRICT METALS vs. Rio Tinto Group | DISTRICT METALS vs. Anglo American plc | DISTRICT METALS vs. Mineral Resources Limited | DISTRICT METALS vs. NEXA RESOURCES SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |